Peddy Hashemi, Managing Director and Global Head of Customer Success, SAP Taulia: “For too long, late payments have acted as a “growth killer”, stifling innovation and forcing many small businesses across the UK into financial distress. We recently published a Supplier Survey report based on the millions of businesses on our network, which found that only 37% of suppliers are now being paid on time, down from 42% in the previous year.

We welcome this long-overdue focus on tackling late payments, a move that will deliver significant benefits to the nation’s small businesses, which remain the cornerstone of the UK economy.

A key development is the Government’s commitment to holding large corporations accountable. Late payments will no longer be treated as a routine accounts payable issue; instead, they will become a board-level priority, with senior management directly responsible for performance.

However, as seen in similar initiatives across the EU, regulation alone addresses only part of the challenge. While stricter payment terms and enhanced reporting requirements create the conditions needed to drive behavioural change, they may also place short-term pressure on the working capital of buying organisations, particularly with the introduction of mandatory interest on late payments.

To address the late payment crisis effectively, businesses must move beyond compliance. The solution lies in adopting technology-driven working capital strategies, including early payment solutions such as Supply Chain Finance and Dynamic Discounting. These approaches enable large buyers to offer suppliers the option of early payment upon invoice approval. In doing so, buyers can mitigate the risk of penalties while strengthening supplier relationships. At the same time, suppliers benefit from improved cash flow, enhanced forecasting, and access to more competitive financing than may otherwise be available.

We are witnessing a global shift towards greater transparency and speed in B2B payments, not only in the UK but internationally. The message from governments is clear: late payment of invoices will no longer be tolerated, and businesses must adapt accordingly.”